Spending Review 2025: Key points announced by Chancellor Rachel Reeves
But the Institute for Fiscal Studies is warning that the Chancellor has so little room for manoeuvre that if 'anything at all goes wrong with any of the current forecasts' further tax rises may be needed in the Autumn Budget.
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Daily Mirror
an hour ago
- Daily Mirror
'Rachel Reeves promises so much - but we're worried how it will be paid for'
Rachel Reeves' Spending Review promised big boosts for the NHS, defence, and housing - but many of you are worried about how it will all be funded If you're wondering where all the money's going to come from to pay for the Chancellor's Spending Review then you're not alone. Rachel Reeves finally delivered her long-anticipated plan to renew Britain – and while there were some big promises, it left many of you asking how it's going to be funded. Standing at the despatch box in the House of Commons, the Chancellor pitched her plan as a blueprint for 'Britain's renewal' and took a swipe at years of 'destructive' Tory austerity. She announced that departmental budgets will rise by 2.3% each year in real terms, with hefty sums heading to the NHS, defence, and housing. In parliament, Ms Reeves batted away claims she would raise taxes and said her spending plans were paid for by decisions made at the Autumn Budget. She repeated her pledge not to raise taxes on working people. But a think tank says tax rises are likely in the autumn. The Resolution Foundation reported the big rise in public spending has been largely paid for by £39.7 billion in tax increases (set for 2028-29) announced in last Autumn's Budget, along with £3.6 billion in benefit cuts (also in 2028-29) revealed in the Spring Statement – which works out to about £1,550 for every family in Britain. "But the combination of a weaker economic outlook, an unfunded spending commitment on winter fuel payments, and just £9.9 billion of headroom against the chancellor's fiscal rules, mean further tax rises are likely to be needed this autumn," it says. We asked Did Rachel Reeves get her Spending Review right? Just 908 of you felt she did, while a whopping 1,982 said she didn't. Many of you responded to our original story, here's just a slice of what some of you had to say: Martinsopinion posted: "I don't know about you, but I don't want to pay more council tax for less services. I wonder what other ways they will find to tax us? Maybe spending money on poorly connected urban sprawl to maybe help a few, when the country needs a new city full of six-storey buildings. The policies are so misguided." Hfchbffch said: "What happened to the 22 billion black hole? Looks like it's gone bigger. Where is all the cash coming from? I don't see any country given money to the UK for all the problems it has got. It looks like the UK working people will foot another bill." 72Momma added: "Where is all the money coming from? Have they actually got rid of the 'black hole' or are they just remortgaging the country? To be able to spend over £102bn ... who is she borrowing from?" Joeyd: "Margaret Thatcher's Reagonomics caused the global economic crash. She sold off Britain to foreign countries for a pittance, wrecked mining, shipbuilding and steel towns across Britain, sold off council housing and put all our money into banking. When the banks collapsed, the country collapsed with them. The Conservative Government introduced 14 years of failed austerity making the rich even richer, and the poorest even poorer. Someone has to reverse decades of neglect, we'll have to wait and see if they carry through with the infrastructure plans she's promising." Seccmjfl01: "It might not be perfect but at least she's trying and making an effort. Things take time and she needed some stability. Good luck to her." Wolveslegends: "The Chancellor promises so much with no money to pay for it. Come the Autumn she will gain the funds from guess where from? All of us will donate to her cause if we like it or not including the disabled and those too old to work. Welcome to New Labour." Reeves is pledging an extra £29 billion a year for the NHS – a real-terms boost of around 3% annually. And on housing, she laid out a massive £39 billion package to build hundreds of thousands of affordable homes over the next decade. It's being called the 'biggest cash injection' in 50 years and is part of the drive to get 1.5 million new homes built by 2029. Following details of the winter fuel U-turn earlier this week, Reeves confirmed plans to restore the payments to millions of pensioners. OAPs with an income of £35,000 or below in England and Wales will receive the benefit this winter. It is a major uplift from the current £11,500 cut-off point announced last summer. In an "age of insecurity" the Chancellor said defence spending will rise to 2.6% of GDP by 2027. She said the figure includes spending on intelligence agencies. 'We will make Britain a defence industrial superpower," Ms Reeves vowed. The Mirror understands schools will also get a major boost to per pupil funding, with £4.5billion extra for the core schools budget. This includes a major expansion of free school meals to 500,000 more pupils. Some £15.6billion will also be handed to mayors for major transport projects across the country. This will go towards plans to improve trams, trains and buses in the North and the Midlands. Other announcements include ending the "costly" use of hotels to house asylum seekers, £3 cap on single bus tickets, and over £14billion worth of investment will go towards building the Sizewell C nuclear power plant on the Suffolk coast. Keir Starmer told the Cabinet that the Spending Review: "Marks the end of the first phase of this Government, as we move to a new phase that delivers on the promise of change for working people all around the country and invests in Britain's renewal." However, Tory Shadow Chancellor Mel Stride slammed the announcement, as he fumed: "This spending review is not worth the paper it is written on.' He goes on to claim Ms Reeves has "completely lost control" and warns of tax rises to come in the autumn."
Reuters
3 hours ago
- Reuters
Rwanda sees economy growing 7.1% in 2025 and 7.5% in 2026
KIGALI, June 12 (Reuters) - Rwanda's economy is forecast to grow 7.1% in 2025, Finance Minister Yusuf Murangwa said on Thursday. The minister added in a budget speech that growth was expected to rise to 7.5% in 2026.
Scottish Sun
6 hours ago
- Scottish Sun
Council tax bills set to rise at fastest rate 20 years after Rachel Reeves spending review, economist warns
This comes despite Reeves insisting she wouldn't need to raise taxes to fund her spending review TAX BLOW Council tax bills set to rise at fastest rate 20 years after Rachel Reeves spending review, economist warns COUNCIL tax bills are expected to increase at their fastest rate in 20 years following Rachel Reeves' spending review. This prediction comes from Paul Johnson, the head of the Institute for Fiscal Studies (IFS). Advertisement 1 In England, local authorities can increase council tax by up to 4.99% each April without holding a referendum Credit: Getty Johnson said that local government in England received "perhaps a little bit better than it might have expected" from the Chancellor's statement on Wednesday. However, he warned of a "sting in the tail" - the assumption that council tax bills will rise by 5% annually as part of the funding plan. The core spending power of councils is set to increase by 2.6% a year from next year, and "if English councils do choose 5% increases – and most almost certainly will – council tax bills look set to rise at their fastest rate over any parliament since 2001-05", Johnson said. On Wednesday, Ms Reeves said that ministers will not be "going above" the 5% annual increases in council tax. Advertisement She told ITV: "The previous government increased council tax by 5% a year, and we have stuck to that. We won't be going above that. "That is the council tax policy that we inherited from the previous government, and that we will be continuing." The NHS was the biggest winner from Wednesday's announcement, which allocated £300billion to public services. Its budget will increase by £29billion a year in real terms. Advertisement Billions of pounds was also allocated to regional infrastructure projects, £39 billion was set aside for social housing, and defence spending was confirmed to increase by £11billion. The Home Office will get less money in the coming years, even though there are promises to hire more police officers and reduce crime. How to challenge your council tax band Treasury documents reveal that Home Office spending will drop by 1.4% per year between 2025-26 and 2028-29, one of the largest cuts among departments. However, Reeves stated that police spending power would still rise by 2.3%, potentially through increased council tax, though the exact amount is unclear. Advertisement Johnson said yesterday on X (formerly Twitter): "Note wording on police funding. Increase in 'spending power' implies that higher precepts from local taxes will play their part." Ruth Curtice, head of the Resolution Foundation, echoed this view. She pointed out that low and middle-income families had gained from the spending review, with the poorest fifth getting an average of £1,700 extra for services like schools, hospitals, and the police. However, she warned that without economic growth, more tax rises could be on the way this autumn to balance the books. Advertisement This comes after the Office for National Statistics (ONS) revealed that the economy shrank more than expected in April, marking the biggest drop in 18 months. GDP dropped by 0.3%, driven by a sharp decline in manufacturing and a record fall in exports to the US after tariff hikes by President Donald Trump. Speaking after delivering her spending review yesterday, Ms Reeves insisted she would not have to raise taxes to cover her spending review. What council tax support is available? By James Flanders, Chief Consumer Reporter There are several ways you can get discounts and reductions on your council tax bill. In some cases, you can even get the bill completely wiped with a council tax reduction. Factors such as your household income, whether you have children, and if you receive any benefits, will influence what you get. To apply, visit here. You'll need your National Insurance number, bank statements, a recent payslip or letter from the Jobcentre, and a passport or driving licence when filling out the details. Below, we reveal all the ways you can get discounts or a reduction on your bill: Single person discount If you live on your own, you can get 25% off your council tax bill. This also applies if there is one adult and one student living together, or one adult and one person classed as severely mentally impaired. If you live with someone who doesn't have to pay council tax, such as a carer or someone who is severely mentally impaired, you could get a larger reduction too, of up to 50%. And, if you live in an all-student household, you could get a 100% discount. Retirees Pensioners may also find themselves eligible for a council tax reduction. If you receive the Guarantee Credit element of Pension Credit, you may not have to pay a penny. If not, you could still get help if you have a low income and less than £16,000 in savings. And a pensioner who lives alone will be entitled to a 25% discount too. Low-income households If you are on a low income or receiving benefits, you could be eligible for a reduction on your council tax, depending on where you live. You could also get a deferral if you're struggling to pay your bill, or you can speak to your council about setting up a payment plan to manage the cost. But one thing to remember is if you are struggling you should contact your council as early as you can. How are council tax bills calculated? In England, local authorities can increase council tax by up to 4.99% each April without holding a referendum. Advertisement This is broken down into a 2.99% increase for general spending and a 2% precept for adult social care. Any increase above this 4.99% limit requires a local referendum to gain public approval. In areas governed by 'two-tier authorities', where responsibilities are divided between two councils, your council tax bill is split into two charges - one set by your county council and another determined by your district, borough, or city council. The proportion of your bill allocated to each council varies depending on the authority, though county councils typically claim the largest share. Advertisement District councils are permitted to increase their portion of the charge by up to 3% annually without the need for a referendum However, these charges have been excluded from our dataset. In addition to the above charges, your council tax also includes contributions towards local police and crime commissioners, fire and rescue services, as well as any applicable town or parish council charges. Councils typically finalise their council tax increases by early March, with the new rates coming into effect from April 1. Advertisement Check if you can claim a council tax refund Over three million households are owed a combined total of £544million in council tax refunds, according to a Sun investigation. The average refund due is around £178, but some could be owed as much as £3,659. Sun Money submitted a Freedom of Information Request to all 349 local authorities in England, Scotland and Wales to find out just how much taxpayer money our councils are sitting on. You can check to see how much cash your local authority might be sitting on by searching for your council in our tool. Advertisement It's surprisingly easy to overpay your council tax, and millions of us do. One of the main reasons is moving house. Council tax is usually billed annually from April to April, but paid in instalments, which means you're always paying some in advance. Therefore, if you move out before the year's end, you'll likely be due a refund for the remaining months. Advertisement Another reason for overpayments is a change in your property's council tax band. If the band is lowered, you're due a refund for the over payments made at the higher rate. Finally, forgetting to cancel your direct debit after moving out can lead to continued payments and further overpayments. Finding out if you're owed a council tax refund is easier than you think. Advertisement Many councils have online claim forms available on their website. To find your local council's site, visit here. You can also contact them directly by phone, email, or live chat.
